It is very important to estimate the interaction between propeller and rudder because the rudder in the propeller slipstream has the large effect on the propulsive performance. Applying the simplified propeller theory based on the infinitely bladed propeller model by Yamazaki (1968) to the propeller-rudder interaction problem is very practical. However, the accuracy of the performance prediction is not enough for the recent researches which are seeking even slightly better performance. There are two problems regarding the simplified propeller theory. One is that the propeller geometry cannot be considered exactly, the other is that the calculation model ignore the hub vortex which is important for the propeller-rudder interaction problem. This paper presents the modified simplified propeller theory in order to obtain more accurate prediction. The present model incorporates the blade circulation distribution by a panel method instead of propeller blade geometry and expresses the propeller slipstream behind the hub by regarding the hub area as a part of the blade area on the propeller plane. In this paper, the calculated rudder drag by the present method are compared with the experimental data for the validation.